This disc is known as "scrubbed". All Wii game .ISO files are 4.37 GB (4,699,979,776 bytes) in size. No matter what, they have to be this size. When a game doesn't meet that file size, the developer will insert dummy blocks of data to fill the disc.

To make things easier for downloading, game rippers would "scrub" the game image down by removing all of the dummy blocks. In all reality, Animal Crossing is only 500MB. Unfortunately, the 3.4 firmware is dectecting the scubbed disc and is coughing up an error. This is done to block priracy.

You have 2 options:
1. Find a full, unscrubbed 4.37GB .ISO and try your luck again.
2. Downgrade the system firmware to the 3.2, install StarFall to disable disc updates, and finally install IOS38.wad. This will play the scrubbed disc you already have.

If it were up to me, I'd go with option 2. It'll give you the Homebrew Channel. By doing so, you'll then get the Wad Manager application. With the Wad Manager, you can then also install Virtual Console and WiiWare to your dashboard too ... along with installing the IOS38 required by Animal Crossing.